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Wage Theft Law “Could Have Saved Me $2000”

PHOTO: Minneapolis home-care worker Robin Pikala says new legislation on wage theft might have helped her when an employer went bankrupt owing her $2,000 in wages. Photo courtesy Minnesota AFL-CIO.

March 4, 2015

ST. PAUL, Minn. - Some Minnesota workers hope lawmakers can help protect them from having their wages stolen.

Part of a package of legislation called the Working Parents Act would toughen state laws against employers who cheat or fail to pay their employees.

It's designed for situations such as that of Robin Pikala, a home-care worker from Minneapolis. Pikala was working for a home-care provider that had financial problems but kept promising to pay hundreds of employees. In the end, she said, they declared bankruptcy despite a state contract, and she lost $2,000.

"They sold everything off and the banks got paid first, of course," she said. "But if you or I defrauded the state of $1.4 million, we'd be in jail."

According to the Economic Policy Institute, wage theft costs American workers $30 billion a year - about twice the cost of all robberies, burglaries, larcenies and motor vehicle thefts combined.

Pikala said she probably would have been evicted if her roommates hadn't covered her rent. She says it was also tough for her home-care clients, who depend on her, so she continued to care for some of them unpaid for a few weeks.

"Because they don't have anybody else," she said. "They don't have family or people to come in and take care of them. So I had to go in there and do it for free, just in the transition between two companies."

Some employers argue that new wage-theft laws would be excessive. They say incidents of wage theft are declining in response to major lawsuits against Walmart and other large companies. But Pikala said more workers are speaking out - people who, in the past, might have been too scared "because they don't have anybody to fight for them.

"What I do, it's mostly people of color and women. They know that people are afraid to say anything, because they don't want to lose their jobs."

One section of the Working Parents Act would boost penalties, extend the statute of limitations and increase education efforts. It also would keep wage theft complaints confidential, to help protect workers from employer retaliation.